The $9.8 billion pension fund will search for the managers following the board's approval at its April 20 meeting of a plan to implement structural changes to its international equity asset class, spokesman Michael Fara said in an email.

Previously, at its Feb. 16 meeting, the board approved investment consultant Verus Advisory's recommendation to make changes to the structure of the international equity portfolio, which has a target allocation of 24%, because the portfolio's relative performance has progressively weakened against the MSCI ACWI ex-U.S. IMI index. The structure approved in February within the pension fund's international equity portfolio consists of 33% passive developed markets (up from 25% of the portfolio), 29% active developed markets (down from 55%), 28% emerging markets (up from 10%) and 10% active international small cap (which remains the same).

The existing international equity managers and their portfolio sizes as of Feb. 16 were BlackRock, which runs $589 million in passive developed markets; Mondrian Investment Partners, which runs $560 million in active developed markets value; Capital Group, $488 million in active developed markets growth; William Blair & Co., $213 million in active emerging markets; Franklin Templeton, $211 million in active small cap; and Bivium Capital Partners, $113 million in active developed markets core.

At the April 20 meeting, the board approved new manager-specific recommendations from Verus Advisory, which includes a search for an additional emerging markets equity manager, as well as a search for an international small-cap manager to replace Franklin Templeton, which is on watch for performance. The recommendations also include terminating Mondrian for performance. Neither termination was specifically approved by the board at the meeting.

Other changes include increasing BlackRock's portfolio to 33% of the overall international equity portfolio, or about $717 million; reducing Capital Group's portfolio to 15%, or about $326 million; increasing Bivium Capital and William Blair to 14% each, or about $304 million each.

Stacey Coleman, spokeswoman at Franklin Templeton, and James F. Brecker III, head of global client service and business development at Mondrian, declined to comment.

Further details regarding a timeline for the RFPs have yet to be determined. ACERA historically has posted RFPs on its website. Verus Advisory will assist with the searches.

As of Dec. 31, the actual allocation to international equities was 24.7%; the target is 24%.

Separately, also at the April 20 meeting, the board approved a commitment of up to $38 million to Crestline Opportunity Fund V, a private credit fund managed by Crestline Investors. It is ACERA's first commitment to the manager.

As of Dec. 31, the actual allocation to private credit was 2.6%; the target is 4%.

The board at its March 16-17 meeting approved hiring Legal & General Investment Management America to run up to $800 million in an international developed markets enhanced index equity strategy, and Acadian Asset Management and First Eagle Investment Management to run up to $350 million each in active international equity strategies, said Alysia D. Jones, board liaison officer, in an email.

According to a memo included with board meeting materials, current passive manager State Street Global Advisors, which as of Jan. 31 ran $1.6 billion in passive international equities and $622 million in passive emerging markets equities for the board, offers those products as commingled funds, and the staff and investment consultant Callan decided they wanted to have some passive exposure in global equities in separate accounts since the rest of the global equity portfolio is managed in separate accounts.

In discussing that possibility, the staff decided to explore an enhanced index strategy to achieve passive returns with a modest upside, and that "the opportunity exists for increasing the scale and breath of such investments, should an initial investment prove to be successful."

Separately, the hiring of Acadian and First Eagle represents the conclusion of a search approved by the board in June 2022 for one to three additional active international equity managers to run up to 40% of the assets currently managed by four incumbent managers for its pool of non-participant-directed plan assets.

As of Jan. 31, those managers were Arrowstreet Capital ($654 million in pool assets), Brandes Investment Partners ($527 million), Capital Guardian Trust ($464 million) and Baillie Gifford ($426 million), according to the meeting materials.

The recommendation to increase the number of active managers "will allow staff additional flexibility in making allocation decisions among managers without overdiversifying the portfolio of managers," according to a memo recommending the search included with June 16, 2022, meeting materials.

At the time, the board said funding would come from reductions in the portfolios of current active managers, and the new materials do not provide specific information on the amounts of the individual portfolio reductions.

Ms. Jones said in her email that the specific funding sources have yet to be determined.

The board oversees the management of a total of $39.9 billion in defined benefit and defined contribution plan assets, including the $23.1 billion Public Employees' Retirement System and $10.7 billion Teachers' Retirement System.

The $277 million pension fund's board approved the hirings at its March 21 meeting, said Melanie Murray, executive director, in an email.

The board approved hiring Fidelity to run $14 million in passive Treasury inflation-protected securities, $11 million in passive domestic large-cap equities and $6 million in passive international equities, all replacing similar portfolios managed by Vanguard Group after investment consultant NEPC recommended the change to achieve a lower fee structure.

For the active domestic smidcap equity portfolio, Boston Trust Walden replaces Rothschild & Co., which was terminated due to organizational changes.

As of March 31, the actual allocations to domestic equities, fixed income and international equities were 25.8%, 18.1% and 15.1%, respectively; their respective targets are 26%, 20% and 18%.